diversifiable risk of combining Healthcare Realty and HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Realty Trust and HNI Corp, you can compare the effects of market volatilities on Healthcare Realty and HNI Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Healthcare Realty with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and HNI Corp.
Diversification Opportunities for Healthcare Realty and HNI Corp
Pair Corralation between Healthcare Realty and HNI Corp
Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to under-perform the HNI Corp. In addition to that, Healthcare Realty is 1.24 times more volatile than HNI Corp. It trades about -0.47 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.14 per unit of volatility. If you would invest 4,105 in HNI Corp on November 27, 2023 and sell it today you would earn a total of 204.00 from holding HNI Corp or generate 4.97% return on investment over 90 days.
Healthcare Realty Trust vs. HNI Corp
Healthcare Realty and HNI Corp Volatility Contrast
Pair Trading with Healthcare Realty and HNI CorpThe main advantage of trading using opposite Healthcare Realty and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, HNI Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HNI Corp will offset losses from the drop in HNI Corp's long position. The idea behind Healthcare Realty Trust and HNI Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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